Walmart E-Commerce Sales up by 29.0% During the Last Quarter, Best Growth in 3 Years

In the 2016 Q4 earnings report published today Walmart reported promising results for Walmart e-commerce. Walmart doesn’t report sales or gross merchandise volume, only the growth rate, so it is hard to analyze their online performance. But the 29.0% growth in sales and 36.1% growth in GMV are impressive.

Walmart e-commerce growth has been decreasing for the last few years, but during the last three quarters of 2016 it has picked up again. The 29% growth reported today is the highest in 3 years since 2013 Q4. Jet.com acquisition in August must be contributing to this.

Walmart also confirmed that there are now more than 35 million SKUs on Walmart.com. This number has increased more that 4 times since the start of year, showcasing the impact marketplace sellers had.

Walmart marketplace continues to grow at 1,000 new sellers every month based on our estimates. At the end of 2016 there were over 7,000 registered sellers. Walmart is still a great opportunity for sellers.

However the marketplace has been struggling as we reported last month:

Average rating for top 100 sellers on the Walmart marketplace is 3.9 out of 5. In comparison, top sellers on both Amazon and eBay have an average rating of 4.9 out of 5. The issue for most sellers is managing expectations - many customers shopping on Walmart.com expect to be buying from Walmart itself.

This year Walmart is making changes to how the company operates, and the role e-commerce plays in this.

E-commerce is still less than 5% of total sales for Walmart. And so far we are not sure what long-term strategy is Walmart going for. The published strategy has been acquiring new sellers and expanding the products catalog online, but that’s not enough. Amazon is ahead and has established their position through offerings like Fulfillment by Amazon, Amazon Prime and ads, at the moment Walmart cannot compete with either of those.

Nonetheless Walmart has unquestionable expertise running a distribution network and handling millions of products a day. By figuring out how to integrate Walmart brick-and-mortar stores into the online shopping experience, Walmart has an opportunity to focus on a different segment than that of Amazon.

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Juozas "Joe" Kaziuk─Śnas

Founder of Marketplace Pulse, Joe wears multiple hats in the management of Marketplace Pulse, including writing most of the articles. Based in New York City. Advisor to other startups and entrepreneurs. Occasional speaker at conferences.

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